12 Universities With the Biggest Endowments

NEW YORK (TheStreet) - Which university overtook Yale, Stanford, Princeton and Massachusetts Institute of Technology to be the second biggest endowment fund in the country last year?

The answer will surprise you. The institution isn't an Ivy League school, but rather a state school that counts First Lady Laura Bush, ExxonMobil (XOM) CEO Rex Tillerson, Dell founder Michael Dell and Southwest Airlines (LUV) CEO Gary Kelly, among its alumni.

Endowments from 832 U.S. colleges and universities returned an average of 15.5% for the fiscal 2014 year (which ended June 30, 2014), up from 11.7% return in 2013, according to a January study by the National Association of College and University Business Officers.

The participating universities in NACUBO's study represented $516 billion in assets. The endowment funds, on average, accounted for 9.2% percent of institutions' total operating budgets, a slight increase from the year prior, the study said.

The increase in return rates has enabled colleges and universities to increase their spending, which in turn supports more student financial aid programs, faculty research and other activities, NACUBO said.

U.S. stocks led the way for these endowments in 2014, returning 22.8%, followed by international equities, at 19.2%. Approximately 51% endowment assets from the study's participating colleges were in alternative strategies followed by international equities (19%) and domestic equities (17%).

Within alternative strategies, venture capital investments had the highest returns in 2014, at 23.3% compared to a 6.1% return in 2013, the study found. Private equity (which included leverage buyouts, mezzanine, M&A funds and international private equity) followed at an average 16.5% return and natural resource investments had an average return of 15.3% in fiscal 2014, the study said.

So, which universities have the biggest endowment funds? Not all of the Ivy League schools made the top of the list. TheStreet used data compiled by Bloomberg and included tuition expenses for each of the universities. Check out which universities made the top 12.

12. University of Notre Dame
South Bend, Ind.
Assets Under Management (6/30/2014): $8 billion
One-year return: 19.7%
Three-year return: 13.2%

University of Notre Dame's endowment had approximately 38% of its holdings in public equities; 29% in private equity; 14% in real assets (precious metals, commodities, real estate); 13% in marketable alternatives and 5% in fixed income, Bloomberg said, citing Notre Dame's investment review.

Full-time tuition, room and board for the 2014-2015 academic year for undergraduates totaled $35,702 at Notre Dame.

11.Columbia University
New York, N.Y.
Assets Under Management (6/30/2014): $9.2 billion
One-year return: 17.5%
Three-year return: 10.2%

Columbia's endowment doesn't disclose its current asset or target allocation. However university holdings, which may include non-endowment funds, show 29.7% in absolute return strategies; 21.6% in private equity; 20% in global equities; real assets making up 18% of its portfolio and cash and fixed income making up the rest, Bloomberg said, citing the school's financial disclosures.

The cost for tuition and fees for the 2014-2015 year was $51,008.


10. University of Pennsylvania
Philadelphia
Assets Under Management (6/30/2014): $9.6 billion
One-year return: 17.5%
Three-year return: 10.9%

Nearly two-thirds of UPenn's endowment was held in absolute return strategies and international and U.S. equities. Another 9.2% was held in private equity investments, while the rest was in fixed income and cash, real estate, emerging markets and natural resources, Bloomberg said, citing the school's annual report.

Tuition, fees and housing for undergraduates cost $56,356 for 2014-2015 school year.

9. University of Michigan
Ann Arbor, Mich.
Assets Under Management (6/30/2014): $9.7 billion
One-year return: 18.8%
Three-year return: 9.4%

More than a quarter of the University of Michigan's endowment was in equities; while another 27% was invested in private equity and absolute return strategies. Another 25% was invested in real estate and private equity, while the rest was in fixed income, cash and natural resources, Bloomberg said, citing the school's investment report.

Tuition, fees and room and board range from about $24,000 a year for freshman and sophomores who are in-state residents to upwards of $55,000 a year for non-resident junior and senior classmen.


8. Northwestern University
Evanston, Ill.
Assets Under Management (8/31/2014): $9.8 billion
One-year return: 16.8%
Three-year return: 11%

Approximately 19.5% of Northwestern's endowment was placed in private investments; 17.7% in absolute return strategies; 16.3% in international equity; 16% in real assets; 13.6% in U.S. equities. The rest was in fixed income, high-yield credit and cash, according to data compiled by Bloomberg.

Northwestern's cost for tuition, fees and room and board for the 2015-2016 school year is $63,983.

7. Texas A&M University
College Station, Texas
Assets Under Management (6/30/2014): $11.1 billion
One-year return: n/a
Three-year return: n/a

Nearly half of Texas A&M University's endowment was held in international and domestic equities. It also had less than 10% of its assets in each of the following categories: private equity; domestic fixed income; alternative marketable equity; real estate and commodities; private real estate and hard assets; and international fixed income, according to data compiled by Bloomberg.

Tuition and fees for in-state residents for the 2014-2015 year are $9,180. For non-residents it jumps to $26,356 per year.


6. Massachusetts Institute of Technology
Cambridge, Mass.
Assets Under Management (6/30/2014): $12.4 billion
One-year return: 19.2%
Three-year return: 12.7%

MIT doesn't disclose its endowment holdings. The university's holdings, which includes non-endowment assets, were nearly 30% in foreign and domestic equities; 17% in private equity; 16% in cash; 16% in real estate and the rest in absolute return strategies, bonds and real assets, according to data compiled by Bloomberg.

MIT's undergraduate tuition for the 2014-2015 year was $43,720. Added with room and board and the price goes to $57,000.

5. Princeton University
Princeton, N.J.
Assets Under Management (6/30/2014): $21 billion
One-year return: 19.6%
Three-year return: 11.3%

One quarter of Princeton's endowment was held in private equity, while another 45% was held in independent return strategies and real assets. The rest was in domestic, emerging and developed equities and a small portion in fixed income and cash, according to data compiled by Bloomberg.

Tuition, room and board for Princeton undergraduates cost $55,440 for the 2014-2015 school year.

 

4. Stanford University
Stanford, Calif.
Assets Under Management (6/30/2014): $21.4 billion
One-year return: 16.8%
Three-year return: 9.8%

Nearly 50% of Stanford's endowment was invested in public and private equity. Another 22% was invested in absolute return strategies, according to data compiled by Bloomberg. The rest was in natural resources, fixed income and real estate.

Stanford's undergraduate tuition for the 2014-2015 year was $14,728 (not including room and board and other ancillary fees and expenses).

 

3. Yale University
New Haven, Conn.
Assets Under Management (6/30/2014): $23.9 billion
One-year return: 20.2%
Three-year return: 12.3%

Yale University's endowment ranked No. 3 on the list. The endowment had 52% of its holdings invested in private equity and real estate. Another 18% in absolute return strategies. Other asset classes including global equities, natural resources and fixed income were each allotted 8% of the assets, according to data compiled by Bloomberg.

Tuition, room and board at Yale for the 2014-2015 year was nearly $60,000.


2. University of Texas
Austin, Texas
Assets Under Management (6/30/2014): $25.4 billion
One-year return: 15.9%
Three-year return: 7.9%

Sandwiched in-between two Ivy League schools is the University of Texas with the second largest endowment fund. More than 60% of the fund's assets are invested in "developed country" equities and emerging market equities. Another 14.3% is in natural resources and the rest in fixed income and real estate, according to data compiled by Bloomberg.

In-state resident tuition at the university varies slightly depending on what undergraduate school the student is accepted to, but generally hovered around $5,000 for the 2014-2015 school year. Nonresident students paid between $16,000 and $20,000 for tuition.

 

1. Harvard University
Cambridge, Mass.
Assets Under Management (6/30/2014): $35.9 billion
One-year return: 15.4%
Three-year return: 8.7%

Harvard University ranked No. 1 with the biggest university endowment fund. The university also happens to be the oldest and wealthiest higher education institution in the U.S., according to Bloomberg.

Roughly one third of Harvard's portfolio was invested in global equities, while another third was invested in private equity and absolute return strategies. The rest of was invested in natural resources, fixed income, real estate and cash.

 

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